28/04/2026

BIZ & FINANCE TUESDAY | APR 28, 2026

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Could Asia be the unlikely winner of Iran war fallout?

HONG KONG: Asia has been the most vulnerable region in the Iran war given its heavy reliance on Middle East energy, but it could turn out to be a major winner from several long-term trends this conflict is likely to accelerate, including higher cybersecurity investment, the pivot away from fossil fuels and supply-chain diversification. The region’s energy-intensive economies – led by China, Japan, South Korea, and India – are highly dependent on Middle Eastern oil and gas. Around 80% of oil and 90% of gas that normally transit through the Strait of Hormuz are destined for Asian markets. The closure of the Strait for most vessels has thus led to sharp spikes in regional energy prices. While China has been relatively insulated due to its massive stockpiles, the rest of the region has faced supply shortfalls, and in some countries, rationing. Yet even though the crisis has laid bare Asia’s energy vulnerabilities, it may simultaneously be accelerating several structural shifts that favour the region in the long term. The conflict is apt to accelerate the global push for more defence spending as well as Asia’s ongoing drive for greater defence self-sufficiency. The region’s world-class semiconductor and manufacturing supply chains may give Asian contractors a production edge that Western peers will struggle to match. For example, Korean arms manufacturers – Hanwha Aerospace , LIG Defense & Aerospace, formerly LIG Nex1, and Hyundai Rotem – have commanded investor attention over the past year due to their strong earnings growth forecasts and large order backlogs. Their market dominance could increase further, bolstered by growing penetration of European markets. Both the Iran conflict and the Russia-Ukraine war have also underscored the efficacy and cost-effectiveness of “new” weaponry, especially drones. The global military drone market is expected to nearly double to US$29 billion by 2030 from US$15.3 billion in 2025, according to market research firm Technavio. Technavio also forecasts similar growth for Asia’s military drone market, which is led by state-backed Chinese aerospace giants. The region’s manufacturers are apt to compete against US, Israeli, and Turkish rivals by leveraging their production scale, cost-effectiveness, and product range.

o Region to benefit from cybersecurity investment, pivot away

from fossil fuels and supply-chain diversification

Asia’s cybersecurity ambitions sit at the heart of a broader global race, underpinned by rapid digital transformation, high threat exposure, government-led investment, and massive hardware manufacturing capacity supporting artificial intelligence-powered cyber defences. The World Economic Forum’s (WEF) January survey reveals that geopolitically motivated cyberattacks are the principal risk corporations perceive today. Unsurprisingly, the WEF survey shows most companies view AI as the technology that will most significantly affect cybersecurity in the next 12 months. AI already appears to be doing just that. For example, Anthropic’s Mythos – a model that is reportedly capable of identifying software vulnerabilities at scale – illustrates both the offensive potential and the defensive imperative. The need to stay one step ahead in the AI arms race could push the US, Europe and others to seek to develop more of their own domestic manufacturing. Until then, the hunger for Korean and Taiwanese semiconductors looks set to remain insatiable. The energy shock created by the Iran war may encourage more nations to accelerate their push away from fossil fuels, expanding electric vehicles, energy storage and green energy overall. China, with its commanding share of the electric vehicle battery market, stands to be a disproportionate winner. According to SNE Research data, Chinese manufacturers account for over 70% of global battery installations, followed by Korean

Employees work on a battery assembly line at the factory of Leapenergy, a unit of Leapmotor, in the China city of Huzhou. – REUTERSPIC

Copper foil prices have surged as much as 30% so far this year, with the rally gaining momentum in March, the source added. Copper accounts for around 60% of total raw material costs in PCB manufacturing, according to Victory Giant Technology, a major Chinese PCB supplier for Nvidia. The Chinese firm warned earlier this month that the Middle East conflict could push up prices for key materials including resin and copper. Multi-layer PCBs can cost around 1,394 yuan (RM806) per square metre, with higher-end models for AI servers costing around 13,475 yuan, according to Victory Giant. – Reuters Dhabi-based NMDC – could all potentially gain from this buildout. Several hurdles remain. If the Strait of Hormuz remains closed for an extended period, it could trigger shortages of energy and industrial inputs, significantly denting Asia’s manufacturing capability. Additionally, Western reshoring efforts, though gradual, could also dampen Asia’s gains. Meanwhile, rising capital costs driven by inflationary expectations risk delaying both the green energy transition and defence projects. The Middle East conflict will end at some point, but its impact on global policy direction will not. – Reuters The views expressed here are those of Manishi Raychaudhuri, the founder and CEO of Emmer Capital Partners Ltd and the former head of Asia-Pacific Equity Research at BNP Paribas Securities.

Korean PCB maker whose customers include Samsung Electronics, SK Hynix and AMD, has begun discussions with customers over price increases, a senior executive at the company told Reuters. The executive, who declined to be named due to sensitivity of the subject, said his priority has now changed from meeting customers to suppliers, as the waiting time for chemical materials such as epoxy resin have stretched to 15 weeks from three weeks previously. The sharp rise in PCB prices was also driven by a shortage of other key materials, including glass fiber and copper foil, according to one source. tailwind for Asia’s nuclear power equipment manufacturers, with Korea’s Doosan Enerbility , China’s Shanghai Electric and Dongfang Electric, India’s Larsen and Toubro and Japan’s Mitsubishi Heavy Industries all potentially standing to benefit. The current energy shock has also shown the danger of over-reliance on a single chokepoint. Diversification of supply routes is thus already moving from aspiration to operational necessity. For example, there are renewed discussions about the India-Middle East-Europe Economic Corridor, a US-backed rail and shipping project to link India to Europe, and Saudi Arabia is considering expanding its East-West oil pipeline, according to the Financial Times. Several Asian companies with long experience and expertise in the Middle East – India’s Larsen and Toubro, PetroChina and Abu

companies at roughly 15%. China also dominates intellectual property in the sector. Chinese firms held 18 of the top 20 rankings for patents in power battery systems in 2023, according to the China National Intellectual Property Administration. This means countries will likely be reliant on Chinese technological prowess as they seek to build up their low-carbon energy capabilities. Nuclear energy is also back in focus as part of the response to the Middle East energy shock – particularly in Asia. South Korea is considering expanding its nuclear power capacity, and Taiwan is contemplating restarting two nuclear reactors. Meanwhile, Japan has signed a $40 billion reactor deal with the U.S. and a nuclear fuel recycling agreement with France. This should create a strong

Mideast conflict disrupts circuit board supply chain BEIJING: The conflict in the Middle East has disrupted supplies of crucial raw materials and pushed up prices of the printed circuit boards (PCB) used in almost all electronic devices, from smartphones and computers to AI servers, industry sources and executives said. forcing a halt in production of high purity polyphenylene ether (PPE) resin – a critical base material used to manufacture PCB laminates. SABIC, which accounts for Demand has been accelerating sharply since March as manufacturers scramble to secure raw material supplies and soften the impact of skyrocketing costs, three industry sources told Reuters.

approximately 70% of the world’s high-purity PPE supply and operates in the Jubail complex on the Gulf coast, has been unable to resume output, severely tightening the availability of the material worldwide, according to one source. Shipping in and out of the Gulf has also been severely disrupted by the war. PCB prices have been climbing since late last year, driven by a growing appetite for AI servers.

In April alone, PCB prices surged as much as 40% from March, Goldman Sachs analysts said in a recent note. Cloud service providers are willing to accept further increases as they expect demand will outstrip supplies over the coming years, they added. The global PCB industry is projected to increase by 12.5% to reach US$95.8 billion in 2026, according to a recent report from Prismark. Daeduck Electronics, a South

The disruption is a fresh blow to electronics manufacturers which are already grappling with soaring memory chip costs and highlights the broadening impact of the Iran war that has wreaked havoc on supply chains, plastics, and oil supplies. Iran struck Saudi Arabia’s Jubail petrochemical complex in early April,